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Mizuho China Monthly MIZUHO CHINA MONTHLY Industrial and Regional Policies 1 China’s Environmental Crackdown: its Outcomes, Challenges and Future Prospects News from the China Advisory Department 14 Introduction to the Hainan Boao Lecheng International Medical Tourism Pilot Zone September 2018 Edition Mizuho Bank, Ltd. China Business Promotion Department Mizuho Bank (China), Ltd. Advisory Department - Executive Summary - China’s Environmental Crackdown: its Outcomes, Challenges and Future China’s Economy Prospects This article provides an overview of the evolution of measures relating to the protection of the ecological environment in China in recent years, the challenges of green investing and the outcomes of energy conservation efforts. It looks at trends in environmental auditing and the factors behind the intensification in this trend, points to the limitations and challenges of strengthening environmental administration, reconfirms the central government’s policy focus on the development of a circular economy, something that Beijing has long identified as a priority, and examines the policy conditions and feasibility of formulating the measures needed to achieve this and to expand cooperation and environmental business with the rest of the world. It closes with an exploration of the need for and feasibility of further growth in environmental cooperation between China and Japan in the new phase of environmental enforcement. News from the China Advisory Introduction to the Hainan Boao Lecheng International Medical Tourism Department Pilot Zone While Hainan Island and Boao comprise an area that’s known as the “Hawaii of China,” these areas have become famous both domestically and internationally as a venue for the Boao Forum for Asia—the Asian version of the Davos Forum. This article will explore the recent trends in the region and will provide an outline of the medical tourism pilot zone built there, along with its purposes, various preferential measures, and future prospects, based on a field study, along with a consideration of business opportunities. China’s Economy China’s Environmental Crackdown: its Yongyu Shao, Ph.D. and Economist Outcomes, Challenges and Future China Business Promotion Prospects Department “The burden is heavy, the road is long” – China’s Mizuho Bank, Ltd. efforts to transition to a circular economy ([email protected]) 1．Introduction China was extremely active in the development of ecological and environmental protection policy during the five-year period of its Twelfth Five-year Plan (12th FYP; 2011-2015), though these moves gathered pace in 2013 with the inauguration of Xi Jinping as president, and the effects were significant. The government has continued to promulgate and implement a series of environmental protection plans that have an ever-stronger focus on energy conservation and emissions reductions since the launch of its Thirteenth Five-year Plan (13th FYP) in 2016 (Table 1), and the formulation of measures (plans) signaling a move towards a circular economy point to an unmistakable trend in environmental policy. This year, which marks the halfway-point for the 13th FYP, the government has unveiled a number of three- year action plans aimed at winning the environmental protection game and the war against air pollution, and the impact of these environmental measures and progress towards a circular economy is attracting widespread attention. Table 1: Ecological and Environmental Protection Measures Introduced by China since 2011 Date No. Title of Measures, Plans, Circulars, etc. Issuing organ promulgated 1 12th FYP Plan for Environmental Protection (2011-2015) State Council Dec. 2011 Notice of the State Council on Issuing the Work Plan for Greenhouse 2 State Council Jan. 2012 Gas Emission Control during the 12th FYP Period 3 12th FYP Special Development Plan for Blue Sky Project MOST and MEP Jul. 2012 (Summary Report on) Policy Mechanisms for Meeting the 12th Five-Year 4 CCICED Dec. 2012 Plan Environment and Development Objectives 5 National 12th FYP on Ecological Protection MEP Jan. 2013 6 Strategy for Developing the Circular Economy and Recent Action Plans State Council Jan. 2013 Notice regarding the Application of Special Emission Regulations to Air 7 Pollutants MEP Feb. 2013 Notice regarding the Disclosure of Processes to Reduce Emissions of 8 Major Air Pollutants at Coal-fired Boiler Unit Desulfurization and De- MEP Apr. 2013 nitration Facilities, etc. Nationwide Detailed Regulations for the Greater Beijing-Tianjin-Hebei and 9 MEP, etc. Sep. 2013 Adjacent Regions Air Pollution Control Action Plan 2014-2015 Action Plan on Energy Conservation, Emissions Reduction 10 State Council May 2014 and Low-Carbon Development 11 Plan to Strengthen Air Pollution Controls in the Energy Industry NDRC, etc. Jun. 2014 Detailed Regulations on (Trial) Methods for Appraising Progress in the 12 MEP, etc. Jul. 2014 Implementation of the Air Pollution Prevention and Control Action Plan Governance Plan on Limiting Air Pollution by Key Industries in the 13 MEP Jul. 2014 Greater Beijing-Tianjin-Hebei and Adjacent Regions 14 Water Pollution Control Action Plan State Council Apr. 2015 15 Soil Contamination Control Action Plan State Council May 2016 16 Guiding Plan for Circular Development (Draft for Public Opinion) NDRC Aug. 2016 Work Plan for Greenhouse Gas Emission Control during the 13th FYP 17 State Council Oct. 2016 Period 18 National 13th FYP on Ecological Protection MEP Nov. 2016 13th FYP Outline for Scientific and Technological Developments in 19 MEP and MOST Nov. 2016 Environmental Protection (2016-2020) 20 13th FYP on Ecological and Environmental Protection (2016-2020) State Council Nov. 2016 21 13th FYP on Energy Conservation State Council Jan. 2017 Industrial and Regional Policies Date No. Title of Measures, Plans, Circulars, etc. Issuing organ promulgated 22 Extended Producer Responsibility Plan State Council Mar. 2017 Guiding Opinions on Promoting Green Construction of “One Belt, One 23 MEP, NDRC, etc. Apr. 2017 Road” Plan for Incorporating Ecological and Environmental Protection into the 24 MEP May 2017 One Belt, One Road Initiative 25 Guiding Action on Circular Development NDRC, etc. May 2017 Decision of the State Council on Amending the Regulations on 26 State Council Aug. 2017 Environmental Protection Management for Construction Projects Law on Water Pollution Prevention and Control (amended for the second 27 MEP Jan. 2018 time on June 27, 2017) Guideline of the State Council to comprehensively enhance ecological 28 and environmental protection and win the battle against pollution of air, State Council Jun. 2018 water and soil Three-Year Action Plan for Winning the Blue Sky Defense Battle (2018- 29 State Council Jul. 2018 2020) Three-Year Action Plan for Resolutely Wining the War against Pollution 30 Prevention and Control in Industry and Telecommunications (2018- MIIT Jul. 2018 2020) Source: Compiled from various Chinese government websites Note: This table includes only major plans on environmental protection (with the exclusion of their regional versions) and is not an all-inclusive list of related policy. The targets for environmental protection in China’s most recent five-year plans (the 12th and 13th) have been particularly stringent and its achievements in this area have also been high (Table 2). It has issued a completely revised version of the Environmental Law (which came into effect in January 2015), a new Environmental Impact Assessment Law (which came into effect in September 2016), and an Environmental Protection Tax Law (which came into effect in January 2018), and for the past two years the central government has been implementing a widely expanded program of environmental audits in its environmental protection campaign, in moves that suggest that China is creating an ever-stronger environmental watchdog. China’s environmental challenges remain deep-rooted and the effects of policy have yet to be fully realized and the government is thought to be seeking to enlighten the public and broadcast its intention of enforcing the new laws through stronger administrative controls. Table 2: Trends in Key Environmental Performance Indicators in China in the 10th to 13th FYP FYP Targets & Periods Achievement 10th FYP Period (01- 11th FYP Period (06- 12th FYP Period (11- 13th FYP Period (16- Rates 05) 10) 15) 20) Target Performanc Target Performanc Target Performanc Target Performanc KPI (versus e (2005) (versus e (2010) (Versus e (2015) (Versus e 2000) 2005) 2010) 2015) (2020) Sulfur dioxide (SO2) -9.8% 27.8% -10.0% -14.3% -8.0% -18.0% -15.0% Nitrogen oxide (NOX) - - - - -10.0% -18.6% -15.0% Chemical oxygen -10.0% -2.1% -10.0% -10.2% -8.0% -8.0% -10.0% demand (COD) Carbon dioxide - - - - -17.0% -20.0% -18.0% emissions per unit of GDP Energy consumption - - -20.0% -19.1% -16.0% -18.2% -15.0% per unit of GDP Source: Compiled from data on the various FYPs posted on Chinese governmental websites. Note: The blanks indicate parameters for which no results have been achieved to date or commitments that China is expected to either fulfil or possibly even surpass. 2 Industrial and Regional Policies This article offers a simple grouping of recent policy on the protection of ecological environment in China and provides an overview of trends in green investing and achievements in the area of energy conservation, which is closely related to environmental policy. It will then look at trends in environmental auditing and the factors underpinning the development of these environmental inspections and point to
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